Socially Responsible International Business
Critical Issues and the Way Forward
Edited by Leonidas C. Leonidou, Constantine S. Katsikeas, Saeed Samiee and Constantinos N. Leonidou
Chapter 6: Re-assessing risk in international markets: a strategic, operational, and sustainability taxonomy
Rob van Tulder and Mihaela Roman
Abstract
A key challenge to the operations of multinational corporations (MNCs) is the management of (real or perceived) risk. Extant international business research does not yet make sharp distinctions between various types of risk and thus also has difficulty in distinguishing between ‘normal’ risks and ‘sustainability’ risks. This chapter distinguishes three types of generic risks: operational, strategic and sustainability risks. We develop a qualitative benchmark/taxonomy that makes it possible to (quantitatively) assess the degree to which sustainability has become important in the risk assessments of MNCs. We explore the heuristic value of this benchmark through a longitudinal coverage of public statements of a sample of 70 MNCs spread over a variety of countries and sectors. MNCs identified an increasing number of risks – in particular, sustainability risks. But sustainability risks can also be treated as opportunities or mitigation strategy. This requires more empirical research for which this chapter provides the basic taxonomy.
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